2016年美国CPA练习题精选：Business 1

　　Coldwell is using a constant growth dividend discount model to forecast the value of a share of common stock. Inherent in Coldwell's assumptions is the idea that：

　　a. Stock price will grow at the same amount as the dividend.

　　b. Dividends will grow at a rate faster than the presumed discount rate.

　　c. Compounding growth is linear.

　　d. Stock price will grow at the same rate as the dividend.

　　答案：D

　　Explanation

　　Choice “d” is correct. An underlying assumption of the constant growth model is the idea that the stock price will grow at the same rate as the dividend, thereby producing a constant growth rate.

　　Choice “c” is incorrect. Compounding growth is exponential, not linear.

　　Choice “b” is incorrect. The constant growth model assumes that the growth rate is less than the discount rate.

　　Choice “a” is incorrect. An underlying assumption of the constant growth model is the idea that the stock price will grow at the same rate （not amount） as the dividend as a means of producing a constant growth rate.